Redmond, Washington — Palm-greasing, while sometimes useful, does not always appears to be an effective method of attracting a large user base, Microsoft has discovered. The software behemoth on Friday announced that it plans to close down its “Bing Cashback,” a promotional program that offered online shoppers cash rebates for buying products after searching for them on Bing by “July 30,” because not enough people stuck around after taking advantage of it.
When introduced back in May 2008, it seems that the program did work in some respects, helping Microsoft establish relationships with a lot of different businesses, which the company considered as a significant way it could change the economics of search.
In a statement, the company said it ended the 2-year-old program because it “had not seen the broad acceptance it had hoped.”
“In many ways, this was a great feature — we had pulled in more than 1,000 merchant partners providing great offers to customers and seeing great ROI on their campaigns, and we were taking some of the advertising revenue and giving it back to customers,” said Yusuf Mehdi, senior vice president for Microsoft’s Online Audience Business Group, in a blog post. “But after a couple of years of trying, we did not see the broad acceptance that we had hoped for,” he wrote.
Microsoft had initiated the rebate promotion to drive traffic to Bing among people doing online shopping. Microsoft would often match the discount offered by retailers who listed products for sale through Bing, effectively doubling the discount for shoppers.
The Cashback program was introduced with some prominent names including eBay, Barnes & Noble, Sears, Home Depot, Zappos.com and Overstock.com. It launched with 700 merchants, so it grew only nominally over two years.
While the notion of Cashback seems attractive, it also has a fair amount of intricacy and that may have kept users away, said analyst Greg Sterling of Sterling Market Intelligence. Users had to sign up and then understand how and when they would get the cash back, he explained. Besides, some people may have thought it sounded too good to be true. “There is an inherent skepticism that people bring to this,” he said.
There is also a probability that the amount offered as Cashback was not enough to entice more users and maybe the merchant partners may have not done enough promotion, he said.
In addition, Cashback was once very essential to Microsoft’s push to position its search engine as one that was ideal for shoppers. Possibly, the Redmond, Wash., company could be in the process of examining its many search initiatives in an effort to discontinue those that are not performing well. “I would guess it has to do with a lot of the rationalization Microsoft is doing given that they have to take on the Yahoo search platform,” said Richard Sim, vice president, product management and marketing at Anchor Intelligence.
Nevertheless, it was also a service that Microsoft founder Bill Gates seemed particularly fond of. He often talked about the potential for the offering to draw people to Microsoft search.
People briefed on the matter said that Microsoft is preparing to unveil a new feed program, similar to one run by Google Inc., that would help retailers drive traffic to their sites without incurring costs. This differs from other comparison-shopping engines that charge advertisers for each customer acquisition.
So the last day individuals will be able to earn Cashback by shopping with Bing will be July 30th (at 9:00 PM PST, to be exact). After that, users will have a year to redeem any cash they earned through purchases before the whole program is terminated.
Bargain hunters cannot be expected to take this news lightly. Still, Microsoft fans have reason to be cheer up since Mehdi said the company will start to channel its energy (and money) into different and more effective approaches to attracting and retaining users.